Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has decided to adopt a flexible policy to increase the salary of chief executive officers (CEOs) of banks and financial institutions. By modifying the illiberal policy in salary determination, the way for salary hike which has been stopped for 3 years has been completely opened. <\/p>\n
Nepal Rastra Bank (NRB) had put on hold the proposal to increase the salary of CEOs in the name of reviewing the 16-year-old policy and making new criteria. As a result, the top leaders of the banking sector were complaining about a great business injustice. <\/p>\n
In particular, CEOs who were newly appointed or renewed for a second term 3 years ago had to settle for the same salary. The NRB’s latest move has given the bank’s board of directors the autonomy to determine the remuneration of the chief executive on the basis of the business capacity and profit of the organization. As a result, it is certain that the salaries of CEOs will be much higher than what they are now. <\/p>\n
Although the new formula set by the Rastra Bank for determining the salary has narrowed some limits on the basis of percentage, the actual amount has set the basis for a significant increase due to the expansion of the business of the banks. In the old system, the bank’s total employee expenses were 5 percent or 0.025 percent of the total assets, whichever is less. The same amount was considered a limit for the CEO’s annual salary. <\/p>\n
In the new system, it has been amended to consider 2 percent of the average employee expenditure in the three fiscal years or a maximum of 0.015 percent of the total assets of the previous year, whichever is less. In percentage terms, this limit may seem much lower than before, but in the last 16 years, the size of the balance sheet of the banks and the volume of employee expenses have increased manifold. <\/p>\n
According to the bankers’ analysis, the implementation of the new formula could increase the salaries of bank CEOs by two and a half times to four times compared to the current one. A confidential internal study conducted by the Nepal Bankers’ Association 6 years ago had concluded that the total facilities (including pension, medical treatment, bonus and other allowances) of the top officials of the central bank were higher than that of the chief executives of the banks. <\/p>\n
The results of the study conducted under the leadership of the then president of the association, Bhuwan Dahal, had angered the NRB officials. As a result, the report was kept without making it public. <\/p>\n
Now Governor Dr. Bishwanath Poudel has removed this obstacle by understanding the spirit of the monetary policy and the business needs of the banking sector. This decision of the NRB is expected to lead to healthy competition among the banks to attract and retain skilled leadership, while the CEOs of the banking sector, who have been in injustice for a long time, will now get fair remuneration according to their performance and the size of the bank.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has decided to adopt a flexible policy to increase the salary of chief executive officers (CEOs) of banks and financial institutions. By modifying the illiberal policy in salary determination, the way for salary hike which has been stopped for 3 years has been completely opened. Nepal Rastra Bank (NRB) […]<\/p>\n","protected":false},"author":16,"featured_media":291809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-305463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/305463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=305463"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/305463\/revisions"}],"predecessor-version":[{"id":305464,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/305463\/revisions\/305464"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/291809"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=305463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=305463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=305463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}